Equality and Human Rights Commission - Public Accounts Committee Contents

3 Re-engagement of staff without HM Treasury approval

13.  A voluntary early severance and early retirement scheme was offered to employees of the Legacy Commissions.[39] 185 individuals joined the scheme.[40] Those employees who chose not to take the scheme transferred to the new Commission under TUPE arrangements.[41]

14.  The Department supported the scheme because the Commission needed fewer staff than the combined Legacy Commissions. Allowing some staff to leave also gave the Commission room to bring in new skills.[42] However, the scheme was run by the Legacy Commissions and endorsed by the then sponsor department (the Department for Communities and Local Government), and the Commission could not dictate who stayed and who left.[43] The Commission recognised that it risked losing some important skills and that both it and the Department could have made better efforts to persuade staff that the Commission would be a good place at which to work.[44] Consequently the Commission was left 140 people short of its complement.[45]

15.  The Commission was particularly short of senior officers, including a Director of Communications, and lawyers.[46] The Chief Executive decided to bring back five senior officers who had worked for the Commission for Racial Equality, and subsequently for the transition team, and two more junior officers, to fill these gaps.[47] The Chair of the Commission was aware that the Chief Executive wanted to bring back these individuals, and that these individuals had received severance payments.[48]

16.  The five individuals were appointed as consultants without an open competition being held, because the Commission was in a great hurry to be ready for the start up on 1 October 2007. The Chair was asked for his opinion on some of the individuals, but had no formal involvement in the appointment process.[49] The Commission accepts that it made mistakes in not holding a competition and now carries out all recruitment on a competitive basis.[50]

17.  The consultants were appointed on day rates of up to £822 per day.[51] In total the seven re-engaged staff received consultancy fees of £338,708 (Figure 3).[52] The Accounting Officer stated that at least some of the consultants, who were working for the transition team at the time, had good reason to expect before they accepted their severance packages that they would be re-engaged.[53] Their severance packages, which cost the Commission £629,276 in total, were calculated on the basis of the number of years for which they had worked for the Commission for Racial Equality.[54] Five of the consultants moved to the new Commission without a break in service, but were not asked to repay their severance packages.[55] The Commission was unable to argue that re-employing them on this basis represented good value for money.[56]Figure 3: The cost of re-engaging former staff as consultants
Period of time employed as consultants
Number of individuals
Severance costs
Consultancy fees
Under three months
Three to six months
Over six months

Source: Qq 11 and 40; C&AG's Report

18.  The Comptroller & Auditor General qualified his opinion on the Commission's accounts because it had failed to seek Treasury approval for these payments and the Treasury refused to grant such approval retrospectively.[57] The Treasury requires that bodies seek approval from it and their sponsor department before entering into such re-engagements.[58] The Commission obtained approval from its then sponsor department for one appointment for a limited period and began to discuss the other re-engagements with its subsequent sponsor department in July 2007. However, the Commission had not obtained approval for the other appointments before five of the staff in question started work as consultants on 1 October 2007.[59] The Government Equalities Office formally referred the matter to the Treasury in January 2009.[60] The Treasury found that the re-engagement salaries were significantly higher than the salaries the individuals had previously received at the Commission for Racial Equality and concluded that the payments did not represent good value for money.[61]

19.  The witnesses could not agree when the Department had made clear to the Commission what information it needed for the business case to be submitted to the Treasury for approval of the payments made to the re-engaged staff. The Department argues that it told the Commission in August 2007 that it should re-engage staff as consultants only if the Commission could justify the rates it wanted to pay them, and that this would most likely be achieved through open competition.[62] The Commission accepts that it should have prepared an adequate business case at the time. However, the Commission told us that it had provided information to the Department which it thought justified the re-engagement and that the Department had taken a very long time before it had told the Commission that a more formal business case was needed.[63]

39   Q 28 Back

40   Q 34 Back

41   Q 32 Back

42   Qq 29 and 34 Back

43   Qq 23, 24 and 29 Back

44   Qq 38 and 43 Back

45   Q 32 Back

46   Q 24 Back

47   Qq 20, 21 and 64 Back

48   Qq 5-7 Back

49   Qq 20, 53 and 54 Back

50   Qq 56-67 Back

51   Q 140 Back

52   Qq 11 and 40 Back

53   Q 130 Back

54   Qq 61 and 40 Back

55   Qq 59 and 60 Back

56   Q 40 Back

57   C&AG's Report, para 12 Back

58   C&AG's Report, paras 11 and 12 Back

59   Qq 8 and 25 Back

60   Q 27 Back

61   C&AG's Report, para 12 Back

62   Qq 9 and 87 Back

63   Qq 8 and 25 Back

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